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A new player breaks into the top 20 cryptocurrencies with the highest market capitalization and it is HYPE, the token of the decentralized trading platform Hyperliquid (which has been dubbed “the decentralized Binance”).
More than a DeFi platform, Hyperliquid has a layer 1 network that focuses on optimizing decentralized finance applications, both in performance and scalability.
This platform uses its own consensus mechanism called HyperBFT, which guarantees rapid confirmation of transactions, while at the same time implementing robust security measures. In addition, it offers a completely “on-chain” order book, which ensures greater transparency and security in operations.
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However, in addition to its technology, it is surprising that in such a short time it has reached a market capitalization of 8.95 billion dollars. At its historical highs of 35.1 USD, it exceeded 10 billion dollars in capitalization and showed monthly growth of over 1000%.
What is driving HYPE price to record levels in such a short time?
Notably, Hyperliquid was launched on November 29, 2024 during a genesis event, where its native token, HYPE, was also introduced. At that time, the Hyperliquid platform distributed its HYPE token to more than 90,000 users during its AirDrop.
The total HYPE in circulation is 270 million, which represents approximately 27.09% of the total supply.
Since then and according to figures from CoinMarketCap, HYPE (in its best moments) has multiplied its price by 10x from its all-time low of $3.20. At the time of writing it is trading at 31.91 USD, with daily gains of 20.2%, weekly gains of 44.34% and monthly gains of 897%.
Right now, this Cryptocurrency occupies the 20th position of cryptocurrency with the highest market capitalization.
There are various factors that drive the price of HYPE to highs, but the underlying reasons are associated with its technology.
For example, Hyperliquid implements a token buyback mechanism that uses 100% of transaction fees to buy back HYPE tokens. This mechanism creates constant buying pressure, driving the price of the token.
Another reason behind the success of this platform is the low fees on perpetual contracts and trades. In addition, these fees are reinvested, as we already explained.
Additionally, Hyperliquid is working on an Ethereum Virtual Machine (EVM) addition, called HyperEVM. Although this integration is in the testing stage, it promises to further strengthen the functionalities, use cases and versatility of the platform.
HYPE Chart Analysis: Key Levels to Consider
Like any new project, it is quite complex to do a graph analysis, due to the few precedents we have.
HYPE price analysis from the Elliot wave theory. Source: TradingView.
On this occasion it is convenient to use the Elliot wave theory, which, when applied to our chart, would indicate that HYPE is in the third and final bullish wave, therefore, a correction would follow.
However, it should be noted that wave number 3 could be in full development and could still last much longer.
We can use the EMAs to define possible support levels:
At 25.1 USD is the 50 EMA, a first support and also where the price tended to sideways. We could place the next support where the 100 EMA or the 20 USD begins to form. A line that could become a level of psychological support.
However, the price would not find really strong supports, until levels as low as 12.4 USD.
We only place two resistances at USD 35.1, its current all-time high, and USD 40, a psychological level.
From the point of view of Elliot wave theory, a rise above these levels would be an extension of wave 3, and The longer this wave lasts, the more risks investors are subject to experiencing a correction..
The RSI at 63 points does not indicate that the HYPE price is overbought. If it were not for the explosive growth in its price, we would say that further increases are still feasible.
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